Strong global demand keeps Aussie beef producers in race to record numbers with prices holding firm despite expanded production
We’ll take whatever volume of beef you can produce.
That’s the line from local buyers and its now backed up with research from Rabobank that indicates our beef industry is set to remain on a firm footing through 2026.
This strong market is flying in the face of record production levels that could have cruelled demand – but hasn’t, due in part to the strong global demand and ever resilient export markets choosing Aussie beef as their first pick.
And according to the agribusiness banking specialist’s at RaboResearch division, while record supply levels and high cattle inventories with peak slaughter volumes would normally present risks, it’s the continued demand from international markets, led by the United States that is providing important price support.
Report author, senior animal proteins analyst Angus Gidley-Baird explained how successive years of favourable seasonal conditions have allowed our cattle industry to rebuild inventory levels to what he believes to be the next cyclical peak.
“This will generate record cattle slaughter and production volumes in 2026,” Angus Gidley-Baird added. “Despite these record volumes, a strong global market is supporting record export prices and, in turn, historically-high cattle prices, particularly for finished cattle.”
The research report projects this strong export market will continue through 2026 and into 2027, driven largely by import demand from the US market.
However, the report also indicated inflationary pressures of the Iran war and the impact on consumer sentiment will need to be watched.
“The strong export market is expected to provide support for the Australian domestic cattle market, and we believe should hold prices around levels seen through Q1,” Angus Gidley-Baird outlined.
A deterioration of seasonal conditions would be the largest risk in the system, he explained.
“With high cattle inventory, dry seasonal conditions – like those conditions being experienced in parts of New South Wales – could force producers to sell stock rapidly into a market flush with cattle.
Angus Gidley-Baird added, “Slaughter volumes are already at historically high levels, adding an additional 10% to these levels as we have seen in previous drought conditions would test the capacity of the system.”
High inventory takes us to the max
“High cattle inventory, and subsequently record slaughter volumes, means Australia is operating close to our maximum processing capacity,” Angus Gidley-Baird wanted to affirm.
The report asserted how current weekly slaughter numbers of around 160,000 head are getting close to the historical highs of 2014, when they reached around 178,000 head.
Currently these volumes are being accommodated but if seasonal conditions were to force an additional 10 to 15% of cattle on to the market – as the sector saw in 2013 and 2018 – it would place serious pressure on the system to keep up, the report indicated.
Chinese import quotas
It is expected the recently revised Chinese import quota for Australian beef in 2026 at around an estimated 205,000 tonnes will have some timing impacts.
Based on current export volumes, it is possible Australian product will reach its quota limit in May or June and this may affect processor-buying activity as exporters look to pivot to other markets.
“China is Australia’s second-largest market for grain-fed beef behind the domestic market,” Angus Gidley-Baird confirmed. “And with the commencement of a new quota year in January 2027 it will provide an opportunity for increased grain-fed beef exports to China in Q1 2027 which in turn may mean an uplift in demand for feeder cattle in September/October 2026.”
While the Middle East is only a small market for Australian beef exports and a relatively small player in global beef markets, Angus Gidley-Baird does concede that conflict in the region does have the potential to increase costs and cause disruption in world beef supply chains.
Middle East conflict minor bearing
“For instance, higher fuel and freight costs may impact sourcing strategies for livestock buyers,” he surmised.
“Inflationary pressures may also impact consumer-spending patterns in export markets. Asian markets are possibly more exposed, given their higher reliance on Middle East oil supplies.”
Cattle price outlook is strong
The research report indicated that finished cattle prices are expected to hold steady, at the high end of the 10-year range.
RaboResearch modelling confirms heavy steer prices should remain close to early 2026 prices through the remainder of the year and into 2027 – around AU$4.50/kg lwt (live weight). While weaner cattle prices are expected to hold steady at around the five-year average in 2026.
The report outlines how strong export markets and demand for finished cattle should help support demand for weaner cattle and store stock.
But high cattle inventory and seasonal conditions are likely to mean there is little upside movement and prices are expected to hover around the five-year average – about AU$4.00 to 4.50/kg lwt – with potential for downside movement.
Financial strength building for producers
The report confirmed the ongoing high cattle turnoff and good cattle prices are leading to expectations of higher incomes for many beef producers, which are anticipated to offset an increase in costs – resulting in a positive financial outlook for 2026.
“Conflict in the Middle East is expected to add costs to budgets, in particular through increased fuel, fertiliser and freight costs,” Angus Gidley-Baird added.
“However, these costs only account for about 10 to 15% of total beef cattle farm operating costs and therefore are expected to have only a limited impact on farm budgets. Rising interest rates, accounting for about an average 10% of costs, will also add to the increasing costs.”
Angus Gidley-Baird also refers the industry to results from Q1 2026 Rabobank Rural Confidence Survey, conducted in February. “Prior to the Iran war 54% of Australian beef producers expect incomes to be the same, with 31% expecting incomes to be higher and only 12% expecting incomes to be lower,” Angus Gidley-Baird concluded.
